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Which of the following entities can legally bind coverage? Federal Insurance Board Agent Insurer The insured - ✔✔C An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? Policies must overlap to cover pre-existing conditions The old policy must be cancelled before the new one can be issued The old policy should stay in force until the new policy is issued There should be a 10 - day-gap between the policies - ✔✔C An agent makes a change on the application and then corrects his mistake by physically entering the necessary information. Who must then initial the change? Agent Applicant Executive officer of the company Insured - ✔✔B Which of the following includes information regarding a person's credit, character, reputation, and habits?
Consumer history Insurability report Agent's report Consumer report - ✔✔D In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? They provide additional information from an outside source about a particular risk They provide information about a customer's character and reputation The customer has no knowledge of this action The customers associates, friends, and neighbors provide the report's data - ✔✔D What is the best way to change an application? Erase the previous answer and replace it with the new answer Write out the previous answer Draw a line through the incorrect answer and insert the correct one Start over with a fresh application - ✔✔D In forming an insurance contract, when does the acceptance usually occur? When an insurer delivers the policy When an insurer receives an application When an insurer submits an application When an insurer's underwriter approves coverage - ✔✔D
Regulates telemarketing Prevents money laundering - ✔✔A What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? Application Policy Request Insurance Request Form Request for insurance - ✔✔A Who makes up the Medical Information Bureau insurers hospitals former insured physicians and paramedics - ✔✔A An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? There is nothing wrong with this form of policy delivery. The insured should complain to the insurer. The insured should ask for a new policy to be delivered. The policy will not be legal until it is delivered by an agent. - ✔✔A
Within how many days of requesting an investigative consumer report must an insurer notify the customer in writing that the report will be obtained? days days days days - ✔✔A An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? Ask the applicant to sign a statement that acknowledges that the policy had been delivered Collects a late payment fee Ask her to sign a statement of good health Offer her a second policy - ✔✔C Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now? The agent should ask the customer to sign a statement acknowledging that he is aware of the change Nothing. After the explanation, the agent is not legally bound to do anything else The agent must notify the beneficiary of the change in the policy If the change would affect the premium, the agent must have the customer sign a statement acknowledging the change - ✔✔A
The spouse of the policyowner The proposed insured The policyowner - ✔✔B The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? Personal Unilateral Conditional Adhesion - ✔✔C If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? days days 10 days 3 days - ✔✔A An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has been done by the insurer to this point? Approved the application Issued the policy
Neither Both - ✔✔C The insurance policy, together with the policy application and any added riders form what is known as Entire contract Certificate of coverage Contract of adhesion Whole life policy - ✔✔A Which of the following is true regarding health insurance underwriting for a person with HIV? The person may not be declined for medical coverage solely based on HIV status A person may be declined for HIV but not AIDS The person may be declined The person may only be declined if he/she has symptons - ✔✔A An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? Aleatory Good health Adhesion Condtional - ✔✔A
Assets Benefits - ✔✔C Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information Unfair trade practices law The guaranty association Consumer privacy act The fair credit reporting act - ✔✔D Which of the following reports will provide the underwriter with the information about an insurance applicant's credit Inspection report Agent's report Any federal report Consumer report - ✔✔D An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated? representation adhesion consideration good faith - ✔✔C
Who must pay for the cost of a medical examination required in the process of underwriting? applicant underwriters department of insurance insurer - ✔✔D What is material misrepresentation? Concealment Any misstatement by the producer A statement by the applicant that upon discovery would affect the underwriting decision of the insurance company Any misstatement made by an applicant for insurance - ✔✔C In insurance, an offer is usually made when the application is submitted the insurer approves the application and receives the initial premium the agent hands the policy to the policyholder an agent explains a policy to a potential applicant - ✔✔A The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses? Arbitration
A right to return the policy for a full premium refund - ✔✔D Which of the following will vary the length of the grace period in health insurance policies? The mode of the premium payment The length of any elimination period The length of time the insured has been insured The term of the policy - ✔✔A Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? Any private insurance policy Only Part A of Medicare Parts A and B of Medicare All four parts of Medicare - ✔✔C What is the period of coverage for events such as death or divorce under COBRA? 31 days 12 months 36 months 60 days - ✔✔C A guaranteed renewable health insurance policy allows the
Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. Insurer to renew the policy to a specified age. Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. Policyholder to renew the policy to a stated age and guarantees the premium for the same period. - ✔✔C The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's Attained age. Assumed age. Average age. Issue age. - ✔✔A An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss? Time of Payment of Claims Incontestability Physical Exam and Autopsy Legal Actions - ✔✔A Disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as
Skilled care. Custodial care in insured's house. - ✔✔C The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses? Subrogation Arbitration Salvage Appraisal - ✔✔A When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees To charge a lower premium every year the policy is renewed. Not to change the premium rate for any reason. To renew the policy indefinitely. To renew the policy until the insured has reached age 65. - ✔✔D If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? 10 days 3 days 5 days 7 days - ✔✔C
COBRA applies to employers with at least 60 employees. 50 employees. 20 employees. 80 employees. - ✔✔C Social Security disability definition includes all of the following EXCEPT A physical impairment expected to result in death. Disability expected to last for at least 6 months. The inability to engage in any gainful work. Disability resulting from a medically determinable mental impairment. - ✔✔B What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application? 90 days after the effective policy date 6 months after the effective policy date 1 year after the effective policy date As long as the policy is in force - ✔✔D Which of the following is considered a presumptive disability under a disability income policy? Loss of one hand or one foot
Amanda is 67 and is covered by a basic medical expense policy - ✔✔D Which of the following is NOT an exclusion in medical expense insurance policies? Routine dental care Coverage for dependents Military duty Self-inflicted injuries - ✔✔B Which of the following best describes the aleatory nature of an insurance contract? Only one of the parties being legally bound by the contract Ambiguities are interpreted in favor of the insured Policies are submitted to the insurer on a take-it-or-leave-it basis Exchange of unequal values - ✔✔D All of the following are correct about the required provisions of a health insurance policy EXCEPT The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. A reinstated policy provides immediate coverage for an illness. Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. A grace period of 31 days is found in an annual pay policy. - ✔✔B
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? The insurer is considered to be notified since the notification to agent equals notification to the insurer. The insurer may delay the payment of this claim for up to 6 months. The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. The insurer may deny the claim since it was not notified within the required 20 - day time frame.
✔✔A What are the three basic coverages for medical expense insurance? Hospital, Surgical, Medical Basic, Major, Overhead Medical, Dental, Vision Reimbursement, Preventive, Service - ✔✔A Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point? Apply for social security benefits Apply for coverage under the same group policy that covers Kevin Convert to an individual insurance policy with 31 days so she won't have to provide evidence of insurability COBRA - ✔✔D
